Zombie bank PTSB has been accused of lying and spinning to hide selling good mortgages on family homes to a vulture fund.

As shocking details of the Permanent TSB scandal emerges, Sinn Fein’s Jonathan O’Brien said he can’t believe the depths to which the bailed-out lender has sunk.

And mortgage campaigner David Hall, who met bank executives yesterday, revealed it is determined to offload the accounts to vultures and has no interest in saving customers – even those who are paying loans.

Today the Irish Daily Mirror begins a campaign to stop PTSB and other banks from selling off up to 42,000 mortgages to vulture funds in a move which could result in mass evictions.

Finance Minister Paschal Donohoe has claimed PTSB and other lenders are being pressurised by the European Central Bank to dump mortgages that are in arrears. But a letter published by Fianna Fail yesterday shows the ECB has issued no such order and has left it up the individual lenders as to how they deal the non-performing loans.

Yesterday Cork North-Central TD Mr O’Brien said: “As more and more affected families contact me, I am deeper and deeper in shock at the levels PTSB is sinking to.

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“I have written to its chief executive Jeremy Masding to demand the end of the sale and, at the very least, the exclusion of those loans which meet the terms of the restructuring agreement.

“Sinn Fein considers this a political issue, not only a banking one. Mr Donohoe owns Permanent TSB and is supposed to use that to benefit the Irish people.

“We will continue to raise this at all levels. Hiding behind the bank and the ECB is not good enough.

“I have already called for the Finance Committee to be recalled, but that may not be sufficient given the stories emerging.”

Mr Hall said: “These loans are being sold and are being transferred to Start Mortgages the vulture fund in 60 days.

“There is no sympathy or understanding of the 1,000 people who have engaged and have had their loans restructured and are meeting full payment despite reassurances earlier in the year that those loans would not be sold.

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“It’s bad news for consumers and the Government is asleep and on holidays and it’s the start of loan sales by many banks.

“The sales are going ahead and this is now a major political issue.

“These are family homes, there are 7,400 homes are being sold of which 1,050 have engaged and are currently paying. There’s an additional buy-to-let properties. What is really reprehensible was over the last couple of months ourselves and other organisations engaged with PTSB customers and PTSB to try and find resolution.

“People in good faith provided information, engaged and agreed solutions and now those solutions are being sold to Start Mortgages.

“They are a fund who wants to profit on assets and a significant number of these loans are in positive equity.

“It is beyond belief an Irish bank controlled by 75% by the minister on our behalf would allow this.

A coffin being delivered to Permanent TSB's head office to PTSB Chief Executive Jeremy Masding calling on him to resign following proposed offloading of mortgages to vulture funds during a Friends of Banking Protest at St Stephen's Green, Dublin (Image: Gareth Chaney Collins)

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“I saw two loans today, one with €3,800 outstanding on a property worth €300,000 and another one with €4,600 outstanding on the loan and €800 in arrears on a house worth €400,000.”

Fianna Fail TD for Laois Sean Fleming revealed he has been inundated with calls and messages from people terrified about the future of their homes.

He told Midlands 103 Radio: “I would expect at least 300 people have received these letters.

“It would be higher than the national average because we’ve had a lot of building over the last 10 or 15 years.

“Some of them will be fine because they don’t owe much money in arrears but some have serious arrears and some of them have been with the Money Advice and Budgeting Service and they’ll want to know if that agreement will hold up.

“Some of them have restructured mortgages and want to know if Start Mortgages will cancel the restructuring arrangement so a lot of people are seriously worried out there.”

Questions PTSB must answer

File photo dated 01/10/08 of a branch of Permanent TSB in College Green in Dublin (Image: Niall Carson/PA Wire)

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The decision by Permanent TSB to sell almost 11,000 home loans to Start Mortgages has left homeowners confused and fearful.

Many have been unable to make contact with the bank while others are unsure if their restructured mortgages will be honoured.

Here are some of the questions bosses need to answer:

1. Will customers on tracker mortgages sold to Start be allowed to keep them at the same interest rate and will those with variable mortgages maintain their current rate?

2. Will those who have paid back part of their debt keep that part or will they forfeit it?

3. PTSB previously gave a commitment that mortgages with split repayment arrangements and other restructured measures would not be included in the sale, why has the bank gone back on its word?

4. Six months ago PTSB agreed to write off debts of some buy-to-let investors if they handed back the properties but now they find their mortgages have also been sold to Start. (we have 10 separate cases)

5. How can PTSB possibly justify linking performing mortgages to non-performing ones when PTSB indicated to the Dail Public Accounts Committee that performing loans would not be included?

6. Why have those affected by the sale to Start found it almost impossible to get information or get through on the helplines provided by PTSB?